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Ofcom has decided that only fixed line ISPs with more than 400,000 subscribers will be forced to comply with the Digital Economy Act's controversial anti-filesharing provisions.

The communications regulator has informed the Internet Service Providers' Association of the benchmark, and said it intends to publish rules within the next two weeks. The decision marks the swift conclusion of talks we reported on towards the end of April.

It means mobile broadband operators will be exempt from the system. The fixed line ISPs that will be required to send warning letters to customers and potentially throttle their bandwidth or temporarily suspend their access are: BT, TalkTalk, Virgin Media, Sky, Orange and O2.

KC, part of the KCOM Group, has less than 400,000 subscribers but does have a monopoly on fixed line internet access in the Hull area, so is also likely come under the regime.

Ofcom's move will be welcomed at dozens of smaller ISPs who target niche and business markets. They argued that the administrative overheads of matching IP addresses to customers and sending out letters would have been disproportionate to the level of copyright infringement on their networks.

For their part, rights holder organisations such as the BPI want to address mainstream consumers who may be persuaded to revert to accessing copyright works lawfully. Between them, the seven ISPs that Ofcom's code of practice will target control more than 95 per cent of the home broadband market.

However, a mass migration of copyright infringers to smaller ISPs is likely to prompt Ofcom to cast its net more widely.

Likewise, filesharing via 3G networks is not currently viewed as a major threat to creative industries. Operators also complained they are currently unable to match IP addresses and timestamps to customer details. It's possible their exemption could be reviewed once faster LTE networks are deployed in the next few years, potentially offering a realistic alternative to fixed line services.

Ofcom is under heavy pressure to draw up its code of practice for implementing the Act quickly. It had eight months from the day it became law on 9 April, to include three months for European Commission approval.

At first ISPs will only be obliged to send warning letters. If these do not reduce copyright infringement by 70 per cent in a year, technical measures such as bandwith restrictions and suspensions will be activated. ®